Working In Strip Clubs – Employee or Independent Contractor?

*THIS BLOG DOES NOT CONTAIN LEGAL ADVICE AND SHOULD NOT BE TAKEN AS SUCH. THIS DOES NOT COVER ALL ISSUES RELATING TO EMPLOYEE RIGHTS AND FURTHER ADVICE SHOULD BE SOUGHT FROM A LEGAL PROFESSIONAL ON THIS ISSUE*

stripper1

Note 1*

Are you an employee or an independent contractor when working for strip club (I prefer to call them “establishments” but will use these words for the purpose of this blog).

This has always been a burning question, and one that I think many strip clubs should be acutely aware of – either they know its a grey area and they are turning a blind eye, or they simply do not know the law when it comes to employment and contracting – and I shall deem them as innocent accordingly.

But when you do a simple “google search” of the words “entitlements” and “strippers”, we have scores of pages of general commentary about how strip clubs do not pay correct entitlements and then we enter the exploitation debate and that is not really the aim of this blog post (that will come later). For the time being, lets have a discussion about the basics of employment law – and the current debate about employment entitlements vs independent contracting.

I am not going to go into the real depths of how to tell whether you are an independent contractor or an employee because it all depends on the particular circumstances of each case (Australian case law specifically states this – it really all depends on a series of factors and those factors are “weighed up” to determine how you should be categorised). If you are an entertainer at a strip club and you would like me to assess your circumstances, please contact me. However, for the time being, what I can tell you is that is that SWOP, in their legal handbook which can be found here —> http://www.swop.org.au/the-legal-kit-download/ —> does a really good job at giving a very simple explanation of the main differences between an independent contractor and an employee (see Section 3 in particular).

What would be the ramifications if found to be an employee and not an independent contractor?

Well, we don’t really know the answer to that in Australia because its yet to be tested (I could not find any cases which specifically dealt with this issue in the sex industry). However, I can tell you that American courts have certainly had their say on this issue recently and American courts have shown that strip club entertainers are in fact employees and not independent contractors.

This was recently tested (to some degree) in the United States by strippers who worked for Jaguars in Dallas, and the result was not too favourable for the owners of the club.

If you read this link —–> http://blogs.dallasobserver.com/unfairpark/2014/12/jaguars_agrees_to_pay_strippers_who_say_they_were_stiffed_23_million.php —-> it tells us that 182 strippers from Texas and Arizona took the stripping chain, Jaguars, to court for failing to pay their employment entitlements. They argued that they were in fact employees and not simply independent contractors who were paid through tips only. The article states:

“The strippers claimed that they often worked more the 40 hours a week without overtime pay, were required to pay a fee just to dance and forced to tip out to bartenders, DJs and house moms, among others. Each of those conditions, and the fact that they weren’t paid a wage at all, would be a violation of the Fair Labor Standards Act were the women found to be employees.”

The case did not actually get to court. My guess is that Jaguars thought it was best to pay out $2.3 million to the strippers in entitlements rather than go through the protracted process where there was a possibility that a court may make a decision against them (and when you think of how expensive litigation is, $2.3 million was Jaguars getting off lightly, simply because of the legal fees they would have had to pay alone just to get the matter heard).

Interestingly enough though, the owners remain convinced that the women were far better off to be classified as independent contractors than employees. This debate interests me greatly.

What are the benefits of being an employee as opposed to an independent contractor?

Being an employee means that you have access to certain work entitlements that you would not ordinarily have access to as an independent contractor – annual leave, long service leave, sick leave, and importantly (in my view), superannuation. If sex workers are able to accumulate superannuation, then this can only benefit them on a long term basis as the benefit of superannuation is that it protects them when they reach retirement age and ensures that they have funds to support themselves when they can no longer work.

However, Jaguars in the United States, and the content of this article —-> http://www.dallasobserver.com/2011-12-08/news/strippers-have-rights-but-do-they-want-them/ —-> suggest that strippers do not want to be employees because it dramatically cuts their pay. You see, independent contractors generally get paid more because their pay is in lieu of all of the entitlements that they are missing out on as being employees. The idea is that as an independent contractor, you become responsible to put money away for things like superannuation, sick days and annual leave on your own accord.

I must pause to give you a very funny quote from this Dallas Observer article:

“But dancers across Dallas, one of the biggest planets in the stripper universe, are skeptical that the lawsuits will affect their bottom lines for the better. They argue that the lawsuits will actually threaten their income stream while handing to lawyers a bonanza in fees — just another set of hands grasping at the glittery wads of cash jutting from their G-strings.”

Just quietly, my argument here (while I continue to stick my hand in strippers’ g-strings) is that if you classify these women properly to begin with, they wouldn’t need lawyers to help them in court to fight for rights which they should have been given from the outset. But I won’t take offense at that comment.

What Is The Real Issue Here?

It is simply this – do you want more money for less rights, or less money for more rights. It really is as simple as that.

Anyway…..

I’d love to hear your thoughts on this issue. Tweet me them at either @KVALEGAL or @KateOnTheGo.

Shout out to my girl, Amanda Brooks, who gets a mention in the Dallas Observer. She can be tweeted at @amanda_brooks. She’s awesome, just quietly.

KVA

Note 1: Image from http://www.ozzienews.com/historic/the-ozzie-stripper/

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One thought on “Working In Strip Clubs – Employee or Independent Contractor?

  1. Don Quixlong c/- Punter Planet or Twitter says:

    Employee or contractor is an interesting question in many situations, from strippers, to massage parlours to brothels and escort agencies. Of all of those, the escort agency is the one most likely to have independent contractors.

    Of note is a recent prosecution by the Fair Work Ombudsman in Melbourne involving workers in a massage place (it’s not clear if this was providing legit massage only or a little RnT on the side). Anyway, in that case, the workers were employed as “sham” contractors when in fact they should have been paid as employees. Two workers have been awarded in excess of $50k in back pay and the case is continuing as a prosecution of the owners.

    Read about it here:

    http://www.theage.com.au/victoria/fair-work-investigates-claims-massage-parlour-fined-staff-for-running-late-20150119-12t48j.html

    Like

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